Battered Casino Plays Send Local Stocks Lower

Hong Kong stocks tumbled on Wednesday, with casino operators crashing after Macau officials unveiled plans to tighten their grip on the sector, while traders were also spooked by retail sales data indicating China's economic recovery slowed further in August.

The Hang Seng Index sank 1.84 percent, or 469 points, to 25,033.

Sands China and Wynn Macau each plunged around 30 percent; SJM Holdings and MGM China lost 25 percent; while Melco and Galaxy Entertainment shed around 20 percent.

Bloomberg News estimated the combined losses for the six big operators amounted to some US$14 billion.

The sell-off came after the Macau government announced a 45-day public consultation that included a proposal for direct supervision over the gambling industry, which has faced increasing scrutiny from authorities in recent years.

Officials are looking to put government representatives on licensed operators' boards to oversee their operations, and to criminalise underground banking in the industry.

The move comes as the government in mainland China embarks on a crackdown on a wide range of industries, including tech and private education firms, as it looks to tighten its grip on the world's number two economy.

The Shanghai Composite Index on Wednesday slipped 0.17 percent, or 6 points, to 3,656, while the Shenzhen Composite Index on China's second exchange eased 0.11 percent, or 2 points, to 2,486. (AFP)